Privatising the NHS in Newcastle

As part of Labour’s privatisation drive, housing, education and healthcare are all for sale in Newcastle-upon-Tyne. In 2006, Newcastle Hospitals NHS trust was awarded Foundation Trust status, giving it unlimited powers to enter into joint ventures with the private sector. Construction has already begun for the largest ever PFI health project in the North East and the closure of the General Hospital draws nearer. SAM MAGILL reports.

Between 1990 and 2000, Newcastle City Trust greatly cut its hospitals maintenance budget, allocating just £200,000 in 2000 for building work. This was despite reports of cash deficits (£7m for the Royal Victoria Infirmary (RVI) in 1997 alone!). Investment in much-needed refurbishment at the General Hospital (£6m) and RVI (£15m) was offered to the private sector. Then in 1998, plans were laid to close the General Hospital in order to build a new centre at the RVI providing emergency, trauma and intensive care, and neuroscience and infectious diseases services. This was due to be finished in 2002 alongside a new renal and cancer care unit at the Freeman hospital.

PFI profiteers
10 years on the completion date is now 2013 and Equion Ltd (a division of John Laing plc) has landed itself a deal worth £304 million to develop the RVI and Freeman. Construction began in 2005 by Laing O’Rourke, funding and management is being provided by Healthcare Support (Newcastle) Ltd (a joint venture including Equion Ltd, Commonweatlh Bank of Australia and Interserve plc). Facilities management and maintenance of the new centres will be provided by Interserve FM. John Laing plc is behind 60 major PFI projects across the UK, including a £180m Ministry of Defence contract, and a £225m Tunbridge Wells hospital project. John Laing saw the value of its infrastructure portfolio rise by more than a third to £610m in 2007.

Bleeding health care dry
Len Fenwick, the chief executive of Newcastle-upon-Tyne hospitals trust, claims the RVI plans will add 99 beds to the 1,890 already available. This is delusional given that PFI schemes require an average 30% bed loss to become affordable. Whilst Fenwick acknowledges that some PFI schemes have run into trouble, he stresses his trust has ‘learned lessons from others’ mistakes and negotiated the best contract.’

However, Newcastle’s health care has already run into problems with privatisation. In 1995 the RVI opened a new multi-storey car park funded by Private Finance Investors Centreland and costing £3m. By 1998 the RVI faced a £350,000 bill for empty parking spaces due to the high parking charges yet was tied into a 15-year lease with Centreland. In April 2007, a different private company, Parkforce UK, took over the parking at the General. They also hiked up prices and directed all the money back into the company – beforehand it had gone back to the hospital. The hospital has to use its own security guards to enforce the new parking system!
Smoke, mirrors and hypocrisy

Currently proposed for the General Hospital site is a ‘campus for ageing and vitality’, incorporating Newcastle University’s Institute for Ageing and Health, an NHS walk-in service and one of Tesco’s 60,000 square foot ‘Regeneration Partnership Stores’. The closure of the hospital is already secured with a £100m deal for redevelopment of its site. The University, who already own large parts of the site, have invested an extra £30m. At the time of printing, it’s uncertain whether Tesco’s will secure their contract due to planning application obstacles. Predictably, in the run- up to the recent local elections, the Labour Party used smoke and mirrors in the Wingrove electoral ward which includes the General Hospital to secure votes: its spring newsletter said, ‘we want answers’ on plans for the General Hospital site from the Lib-Dem council. This is gross hypocrisy considering it is the Labour government that is driving PFI projects and hospital closures locally and nationally! The only thing that’s certain for the future of health care in Newcastle is soaring profits for John Laing and friends, protection of big business and a squeeze on healthcare that will hit the working class of the North East hardest.

FRFI 203 June / July 2008


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